Kazakhstan Chamber of Commerce in the USA

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Нефте-Боратовый имидж Казахстана в Америке пора менять 0

Posted on April 19, 2010 by KazCham

Соединенные Штаты давно уже являются привлекательным и выгодным торгово-экономическим партнером для стран Центральной Азии. Однако партнерство это сводится главным образом к работе в регионе американских энергетических компаний да просьбам Вашингтона подсобить в осуществлении операции сил коалиции в Афганистане. А вот самим центральноазиатским государствам на рынок США пробиться крайне сложно, да и разного рода препон на этом пути остается более чем достаточно.
Поэтому весьма символично, что первой страной Центральной Азии, которая открыла в Соединенных Штатах (город Нью-Йорк) представительство своей Торгово-промышленной палаты, стал именно Казахстан. О том, чем оно занимается и каким образом намерено оживлять казахстанско-американское деловое сотрудничество, рассказывает руководитель представительства Юлия Даурова.

По словам Юлии Дауровой, коэффициент рентабельности инвестиций в Казахстане доходит до 150%

– Продвижение политических интересов Казахстана уже давно ведется Астаной весьма активно, и нынешнее председательство в ОБСЕ, а на будущий год – в Организации Исламских государств – тому яркое свидетельство. А как обстоит дело с убеждением зарубежных стран развивать с Казахстаном деловое и экономическое сотрудничество? И как в этом плане способствует этому механизм работы за рубежом казахстанской Торгово-промышленной палаты?
– За последнее кризисное время усилился интерес американских компаний к развивающимся перспективным рынкам, к которым относится и Казахстан. Благодаря внедрению индустриально-инновационной стратегии правительством Казахстана активизировались в нашем направлении инвестиционные компании и банки Соединенных Штатов. Поэтому неудивительно, что большая часть запросов в наше представительство приходится именно на них.
Так, один из крупных фондов США считает, что лучшими инвестициями за последние 10 лет для них оказался проект именно в Казахстане, где коэффициент рентабельности этих инвестиций составил 150%, что является весьма высоким показателем. Вместе с тем многие американские компании просто хотят поподробнее узнать об экономической ситуации у нас в стране, поскольку все еще опасаются политических и финансовых рисков. Да, к Казахстану сейчас проявляют интерес американские компании, представляющие агропромышленный сектор и сферу химического производства, но, на мой взгляд, они все еще очень осторожны.
Чтобы как-то расшевелить их, мы планируем проведение постоянных семинаров и конференций, сориентированных на целевые аудитории по отдельным секторам развития экономики и торговли, а также по вопросам ведения бизнеса в Казахстане. В этом нам активно содействует юридическая компания Грата, аудиторская компания PricewaterhouseCoopers Kazakhstan, Broad Street Capital Group и, конечно же, Посольство и Консульство Казахстана в США.
Мы уже запустили механизмы маркетинга социальных сетей, а в ближайшие недели планируем провести целый ряд мероприятий по продвижению делового имиджа нашей страны в Америке, потому что нам по-прежнему часто говорят, будто о Казахстане очень трудно узнать. Вот и постараемся такое отношение как-то изменить.
Хочу еще раз подчеркнуть, что интерес – как со стороны американских компаний, так и казахстанских, к ведению совместного бизнеса есть. В основном он касается инвестиций и импортно-экспортных операций. Но при этом тем же американским компаниям очень трудно связаться с нужными людьми в Казахстане, они не знают, как это лучше сделать, попадают в своего рода информационный вакуум.
Все прошедшие годы этим занималось наше посольство в Вашингтоне, но оно сильно загружено работой по другим направлениям. Поэтому теперь именно мы надеемся стать тем «деловым мостиком» между нашими двумя странами и обеспечивать оперативной информацией американцев о проектах, законодательстве, инвестиционном климате в Казахстане.

– Соединенные Штаты с самого момента провозглашения Казахстаном независимости активно работали в республике в области энергетики. Как в этой сфере американцы действуют в Казахстане сейчас? И каково примерное соотношение участия бизнеса США в области добычи нефти в Казахстане и всеми другими проектами?
– За годы развития двусторонних экономических отношений Соединенные Штаты инвестировали в экономику Казахстана 14.3 миллиарда (это с 1993 года) – причем в основном именно в нефтегазовую промышленность и сопутствующие ей услуги. Однако сейчас экспорт из США в Казахстан упал до уровня 2005 года и составил 600 миллионов долларов за 2009 год, хотя было время, когда он доходил и до миллиарда долларов. Замечу, что из этой суммы 40% приходится на оборудование для нефтяной отрасли, 25%-на транспортную технику, а все остальное – на компьютеры, телекоммуникации, электронику и химическую промышленность.
Несмотря на то, что сейчас в области развития сотрудничества с Казахстаном активизируются американские агропромышленные компании, а также фирмы, занимающиеся поставкой медицинского оборудования, плюс образовательные учреждения из США, которые хотели бы инвестировать в проекты на территории Казахстана, мне кажется, что существующее процентное соотношение инвестиций в нефтекомплекс и другие области экономики Казахстана не изменится. Наверняка все те же 65% американских инвестиций в нашу республику будут и в будущем приходиться на нефть, газ и сопутствующие транспортные магистрали.

– Как вы считаете, насколько в целом изменился общий «деловой фон» Казахстана в Америке по сравнению с тем, когда это бизнес-сотрудничество только начиналось? Не кажется ли вам, что американцы, даже несмотря на свое уже почти двадцатилетнее присутствие в республике, все же очень плохо информированы о Казахстане и мало представляют себе его реальный бизнес-потенциал?
– Не хочу показаться банальной, но Казахстан для большинства американцев – это все еще нефть и Борат. Вот и весь имидж нашей страны для среднего американца. Те же американские инвесторы бурно реагируют на слово «нефть» применительно к Казахстану, однако они по-прежнему совершенно не знают о том, что Казахстан является, к примеру, одним из крупнейших в мире экспортеров меди, урана и зерна.
Когда им об этом говоришь, то для них это целое открытие. Поэтому можно констатировать, что для изменения положения потребуется большая работа по продвижению имиджа нашей страны с участием крупнейших американских и казахстанских компаний. Чтобы слово «медь» в той же Америке ассоциировалось с работой компании «Казахмыс» например, а производство алюминия – с ENRC и так далее.
Пока что общий деловой фон во взаимоотношениях Соединенных Штатов и Казахстана не особо изменился. На первом месте по-прежнему остается нефть. При этом казахстанский экспорт в США за кризисный год сократился всего лишь на 65 млн. долларов и составил 1,545 млрд. долларов. Конечно, это в основном нефть, а все остальное – это главным образом руды и металлы.

– Энергетика и ее развитие для США применительно к сотрудничеству с Казахстаном остается приоритетной сферой – в том числе инвестиционной. Но вот самому Казахстану от Соединенных Штатов нужны деньги и на совсем другое – развитие сельского хозяйства, малого бизнеса, транспорта. Что удалось сделать за эти годы для привлечения из Америки в Казахстан компаний не-энергетического сектора?
– Знаете, это сложный вопрос. Судя по тому, что большинство американских компаний, обращающихся к нам за советом и информацией, инвестиционные, то они, в принципе, готовы сотрудничать со своими партнерами в Казахстане по самым различным проектам. Однако все американские партнеры заинтересованы приоритетно в государственно-частном партнерстве в Казахстане или хотя бы в организации у нас в республике совместных предприятий. То есть все американские инвесторы хотят для работы в Казахстане серьезных гарантий.
Насколько я понимаю, эти американские компании обращаются в наши министерства, подают свои заявки на проекты, а потом годами надеются получить из Казахстана какой-либо ответ. Думаю, что если бы американские инвесторы были более осведомлены о нашей стране, то обращались бы в Казахстане напрямую к компании-партнеру, и это бы наверняка ускорило процесс. Но в результате эти американские компании попадают в информационный вакуум, и никакого дальнейшего развития партнерство не получает.

– А каковы интересы казахстанского бизнеса в Америке? И насколько те же представительства вашей Торгово-промышленной палаты могут помочь казахстанским предпринимателям работать и найти партнеров на американском рынке?
– Пока официально наш казахстанский бизнес в Соединенных Штатах представлен только одной компанией – Wimpex. Однако у наших нефтяных компаний есть прочные деловые связи с американскими партнерами, они имеют свои представительства, плюс есть партнерство и на уровне авиакомпаний.
Я встречалась в Америке с несколькими частными инвесторами из Казахстана. Так, одна казахстанская компания здесь открыла стекольный завод, а потом его выгодно перепродала тем же американцам. Есть еще компания, принадлежащая одной казашке, которая занимается импортом икры из Казахстана в Соединенные Штаты. Еще наши молодые ребята открывают здесь рекламное агентство, создали дизайнерскую студию и модельное агентство.
Если же говорить о перспективах казахстанского бизнеса в Соединенных Штатах, то большие возможности имеются для работы у горнорудных компаний и наших производителей зерна. В Америке есть потенциальные покупатели казахстанского урана, золота и зерна, так что в этом направлении потенциал для взаимного сотрудничества есть неплохой.
Думаю, что и для малого бизнеса из Казахстана тоже есть в Соединенных Штатах свои ниши. К примеру, в таком огромном городе, как Нью-Йорк, нет ни одного казахстанского ресторана, а казахов здесь живет примерно 10 тысяч плюс русскоговорящих здесь почти два миллиона. И это не считая весьма активного остального населения города, достигающего примерно 10 миллионов жителей. Вот вам и возможности для наших Алаши или Тюбетейки.
Что касается непосредственно нашей деятельности, то казахстанским компаниям мы готовы помочь и в поиске партнеров в Соединенных Штатах, и покупателей, и совместного финансирования, регистрации, иммиграционных вопросах и других вопросах. То есть если есть хорошая идея и частичное или полное финансирование с нашей стороны, то вполне возможно организовать казахстанский бизнес здесь, в Соединенных Штатах.

– В чем, на ваш взгляд, состоят главные проблемы, которые на сегодня мешают казахстанским и американским предпринимателям успешно взаимодействовать? Только ли здесь проблема в отсутствии должной информации друг о друге или помехи есть больше в менталитете, образе жизни, культурных различиях?
– По большому счету, проблем несколько: они заключаются и в отсутствии должной информации, и в том, что мы говорим на разных языках, и в дальних расстояниях между нашими странами. С другой стороны, работе китайских и российских компаний в Соединенных Штатах это ведь никак не мешает. Тут есть такие представители зарубежного бизнеса, которые даже на английском не говорят ни слова, а зато годами успешно работают на американском рынке.
Согласна, что, возможно, это частично связано с проблемой различия в менталитете. На мой взгляд, есть такие чисто социальные и культурные моменты во взаимоотношениях двух стран. К примеру, казахи издавна живут своим укладом, патриархальной структурой и им намного труднее адаптироваться к весьма специфической американской культуре. Американцы по своей натуре более открыты, напористее в поведении, и в чем-то им проще вести бизнес. Тот же дресс-код, например, у них очень конкретен, а для нас что-то может быть в той же одежде неприемлемо. Но современный бизнес – это ведь не устоявшиеся веками семейные отношения, поэтому, наверное, здесь надо быть гибче и менее формальными. Но все же основной фактор, мешающий активизации наших двусторонних связей, – это отсутствие своевременной и надежной информации друг о друге.

– С учетом того, что централизованная бюрократия в США крайне сильна и в оперативном решении бизнес-вопросов мало-поворотлива, гораздо выгоднее было бы для вашей палаты затаскивать в Казахстан представителей и руководителей компаний отдельных штатов страны, которые гораздо более гибки в принятии решений и будут намного больше заинтересованы в тех же инвестициях и проектах в Казахстане.
– К сожалению, засилье бюрократии душит развитие бизнеса не только в Соединенных Штатах, но и у нас в Казахстане. Однозначно ситуация улучшилась с приходом молодых и динамичных вице-министров в казахстанском правительстве, до которых все же легче «достучаться», они более открыты к контакту и намного быстрее реагируют на те или иные запросы.
Но все же ситуация с бюрократическими препонами остается тяжелой. Например, мне на мой электронный имейл присылают уже согласованные отсканированные ответы на официальных бланках. В американской бизнес – среде до этого не додумались, а отвечают, как это принято по международному деловому этикету, по почте в течение 48 часов.
Есть еще и существенная разница в ведении дел государственными учреждениями двух стран. К примеру, в Соединенных Штатах на любой запрос рано или поздно бизнесмену все равно ответят – обычно это происходит в течение максимум пары недель, иногда, бывает, тянут и по два месяца – но ответ все равно будет. Причем в Америке чем выше чин, к кому вы обращаетесь, тем больше гарантий, что вам дадут скорый ответ. А в Казахстане с запросами-ответами бизнесмен попадает в настоящий Бермудский треугольник.
Что касается представителей американских штатов и их заинтересованности в сотрудничестве с Казахстаном, то тут вы абсолютно правы. У нас уже налажены связи со штатами Луизиана на юге США – это нефтяной и портовый штат; Небраска – по сельскому хозяйству; штат Вашингтон на Тихоокеанском побережье. Сейчас мы работаем над расширением наших деловых связей в Калифорнии, а также планируем заключить соглашения с местными бизнес-ассоциациями в Нью-Йорке.
Американцев мы убеждаем, что открыты и рады различным формам двустороннего сотрудничества, пытаемся помочь им активно работать на обоих рынках и надеемся на успешную реализацию наших планов, на укрепление торговых отношений между США и Казахстаном.

Источник: Деловая Неделя Казахстан. 2 апреля 2010. Юрий СИГОВ.

Modernising mines for safe environment and profit 1

Posted on April 06, 2010 by KazCham

STEEL GIANT ARCELOR-MITTAL owns the Temirtau  steel complex, some 50km from Kazakhstan’s  mining capital, Karaganda. The bankrupt plant  was bought in 1995 by Lakshmi Mittal, the Indian  entrepreneur, together with a string of nearby  coal and iron mines. The mines guarantee supply  security at low cost and helped generate large profits at the steel plant.

Once the global steel market started to boom, cash  flow generated by low-cost Temirtau, together with  the valuable experience gained turning round the  Soviet-era giant, generated the confidence to buy a  string of similar plants in Ukraine, Romania, South  Africa and elsewhere. In this way, Mittal’s Kazakh  investment helped the company gain the critical  mass, and the cash, to win control over the Franco- Luxembourg Arcelor steel group three years ago. The  merged Arcelor-Mittal is now the world’s largest steel group, with the Kazakh company contributing about  8 per cent of the total.

However, a series of deadly methane explosions in  some of the company’s eight Kazakh coal mines over the -last three years underlined concerns that the company  had not paid sufficient attention to the poor state of the Soviet-era underground mines that had been starved of  investment for years before the Soviet collapse. Critics  said Mittal knew less about mining than it did about  steel. Certainly, when this correspondent went down  the flagship Lenin mine a few years ago, miners were  wearing little more than rags, the access shafts were  littered with broken-down machines, they were poorly  lit and had little ventilation. Working conditions in the  mine were worse than in similar mines I had visited in  South Africa.

Safety awareness campaigns designed to change  the inherited Soviet-era low priority for safety were  not enough to change the inherent dangers of  deep, sloping mines producing volatile, gaseous  coals. These are great for coking and steel making  but dangerous to mine using the inherited Soviet  technology. Sections of the mine were frequently  being closed to evacuate the methane gas and prevent dangerous accumulations.

Eventually, after a string of serious explosions,  in which 125 miners died over a four-year period,  Arcelor-Mittal turned to two US specialist companies,  EnSafe, a Memphis-based environmental engineering  company, and Dallas-based Petron Resources, to  develop a de-gasification system capable of safely  extracting the estimated one billion cubic feet  of methane estimated to be recoverable from  the coalfield.

Mittal obtained a $100 million loan from the  European Bank for Reconstruction and Development  to help finance the project, which is part of a much  wider, $5 billion scheme to double steel capacity at  Temirtau to around 10 million tonnes over the next  few years. This will also require much more extensive mining of coal, iron and limestone, all of which are  found in the Karaganda basin.

Don Cowan, vice president of international  projects for EnSafe, says: “There are three aspects to  the project – health and safety, mine productivity  and gas production.” Doug White, CEO at Petron  adds: “The first objective is to make the operations  safer, but Mittal also wants to earn greenhouse  emission credits.”

According to the Stern Review of the Economics  of Climate Change, methane has a global warming  impact 23 times more damaging than carbon  dioxide. By extracting methane from the mines,  reducing ‘fugitive emissions’ seeping out of the  mines and safely channelling the gas, using  methane mining techniques developed by the oil  and gas industry, the project will save lives, cut  costs – and provide a new fuel source sufficient  to power a 200mw power station. As a result of  Kazakhstan finally ratifying the Kyoto Treaty this  year, the company will probably also qualify for  greenhouse emission credits, which will help pay for the projects

David Vint, a veteran Scottish coal mine engineer,  is running the Karaganda methane project. His goal  is to achieve safer working conditions and make  fullest use of the gas recovered.

Explosions occur, he explains, when the methane  escaping naturally from the coal mixes with oxygen  and is ignited by a spark. Mining the methane  involves driving channels through the coal seams,  using multi-directional drilling methods and  equipment, such as blow out preventers developed  by the oil and gas industry. Channels drilled through h the coal create manageable gaps through which the  methane naturally flows into collector pipes, which  can safely transport it to the surface. “Concentrated  methane in a pipe is safe methane. You can burn  it, in a power station for example, but it lacks the  oxygen to explode,” Vint explains.

Higher productivity from modern mining  machines means that more gas can be liberated from -the cut coal. Doubling capacity of the steel plant  will require more and bigger mines. But if current  trials are successful, making the mines safer will  also deliver greater volumes of useful gas. “If the gas  potential from existing, new and exhausted mines  is added together it could provide enough gas to  generate up to 200mw of power,” Vint says.

That will be relatively clean power – energy which  Mittal will no longer have to buy from the over-loaded national grid, which is produced mainly by polluting h coal-fired power plants. The main question still open  at this stage is whether methane mining techniques,  which have been proven successful in shallower US  and Australian mines, will work, or can be adapted  to work, in Kazakhstan’s relatively deep mines. If the  current trials are successful, not only will mining  become safer, but Kazakhstan, with its vast coal  deposits, will also acquire considerable additional  energy reserves.

Invest in Kazakhstan An official publication of the Government of the Republic of Kazakhstan, 2009. Pages:72-73.

Honorary Consul of the Republic of Kazakhstan 0

Posted on March 25, 2010 by KazCham

Bayou Region, LA – March 5, 2010 – Mr. Paris “Pye” Theriot, Director of International Development for the South Louisiana Economic Council, has been appointed  Honorary Consul of the Republic of Kazakhstan and  received credentials at an official ceremony Friday, March 5th in Baton Rouge.  As Honorary Consul, Mr. Theriot will serve on behalf of the Consular Department of the Kazakhstan Embassy in Washington D.C.  to promote cooperation between government, commercial and academic interests both in Kazakhstan and in the states of Louisiana, Mississippi and Alabama.  In his role as Honorary Consul of the Republic of Kazakhstan, Mr. Theriot will also serve as an official representative on behalf of the Kazakh government at state and federally sponsored events.  The appointment comes at the recommendation of Louisiana Congressman Charlie Melancon and Louisiana Lieutenant Governor Mitch Landrieu and is an official appointment of the Kazakhstan Ministry of Foreign Affairs, with approval by U.S. Department of State.

SOURCE: http://www.kazakhconsul.com/index_files/Page390.htm

Foreign banks 0

Posted on March 22, 2010 by KazCham

WITH THE BENEFIT of hindsight, the timing of the  first major foray by foreign banks into the domestic  banking market could hardly have been worse. But  from a long-term perspective, the decision of Italy’s  UniCredit and South Korea’s Kookmin Bank to  pay $2.3 billion and $1 billion respectively for ATF  and BankCentreCredit (BCC) just before the global  financial crisis erupted in the summer of 2007 could h well turn out to be prescient once Kazakhstan and Central Asia return to the path of rapid growth.

For UniCredit, the move into Central Asia’s richest h and most dynamic economy was an extension of its  previous foray into Central Europe as the acquisitive  Italian bank looked to diversify beyond slow-growing western European markets. For Kookmin, expansion  into resource-rich Kazakhstan reflected both  expectations of faster growth than Korea itself and  a chance to position itself for an expected influx of  South Korean investment in energy and commodity projects – including nuclear. In May 2009, Kookmin’s  chairman was a prominent member of a South Korean business delegation which earmarked projects worth $5 billion for investment by Korean companies  and banks.

“We strongly believe that a strategic partnership  will bring us competitive advantages and make it  easier to deal with any financial wobbles,” says Timur  Ishmuratov, managing director of BCC’s international  department. “Kookmin, like our bank, has a focus  on the retail and SME [small- and medium-sized  enterprises] market. It offers some very good products,  based on sophisticated IT infrastructure, which could  potentially be very good for our clients, too.”

Kazakh banks grew by focusing on corporate  finance and the construction sector. In both cases,  personal contacts were often key to business. While  local banks were active in the corporate market, their  understanding and penetration of the retail market,  especially mortgage lending, was low. Just as they  were developing expertise in these areas, retail and  mortgage lending became the first casualties of the  sub-prime crisis.

Some foreign banks spotted the opportunity to  expand, while local banks pulled back to focus on  repaying debts. HSBC, for example, one of several  foreign banks working in Kazakhastan for more  than a decade, recently decided to open several  new branches and make an additional $100 million  available for mortgage finances

Before the entry of UniCredit and Kookmin into  mainstream banking, most foreign banks, including Citibank and ABN-Ambro, concentrated on servicing the Kazakh subsidiaries of international companies  and expats and facilitating foreign borrowing for  Kazakh banks and companies. ABN was acquired  by Royal Bank of Scotland and its former Kazakh  subsidiary is now looking for a new owner following the virtual nationalisation of RBS itself in the UK  banking meltdown.

Before the global crisis brought banking back  to Earth, dozens of foreign banks were seeking to  get a foothold in the market by buying a Kazakh  bank. But prices were sky high and several potential  foreign buyers, such as Austria’s Raiffeisen, which  first sought to buy BTA several years ago, were unable to find suitable acquisition targets at an acceptable  price. “We observed the market but the prices did  not reflect the environment and potential risks, so  we decided to start from scratch,” a bank spokesman  said. The alternative plan to start a greenfleld bank is  currently on hold.

Now may be a good time for potential buyers  to look again, however. While the government is  focused on finding a new foreign owner for BTA, new  regulations setting a tenge 5 billion ($3.5 million)  minimum capital requirement for Kazakh banks  come into force in July, putting pressure on smaller  banks to consolidate or put themselves up for sale.  International Bank of Alma ty, with a capital of just  tenge 1.5 billion, was recently taken over, for example,  and is now being re-branded as Home Credit.

Ironically, just as Kazakh banks have become open  to takeover and more attractively priced, most foreign banks have drastically scaled back their expansion  plans. “Without the international crisis I would say  that we could expect more investment in Kazakhstan, h because prices are now optimal,” says Alexander  Picker, the Austrian president of ATF Bank. “But,  while any bank not looking to expand in Central and  Eastern Europe used to get a bad mark from analysts,  now it’s the opposite. I don’t know how many banks  will be brave enough to see the potential and act. It  depends very much on the bravery and anti-cyclical  ideas of boardrooms – many of which are in survival  mode at present.”

Several investment banks, including JP Morgan,  which has an important advisory role with Kazakhmys h and other big corporates, and Deutsche Bank, have  recently set up representative offices in Almaty,  to show the flag and be ready for more ambitious  moves, when the time is right. There is currently high  demand for advisory services – with UBS and Goldman h Sachs, for example, recently taken on as advisers to the government on settling the future of BTA.

Russian banks are also stepping up their presence. Sberbank, currently eyeing up BTA, leads the pack  while VTB, Russia’s former foreign trade bank, has  pared down its expansion plans for the CIS generally to concentrate on what it sees as the most attractive  markets – Kazakhstan and Azerbaijani

On the investment banking side, Russia’s Troika  followed Renaissance Capital into Kazakhstan  last year through the acquisition of local asset  management house Almex, and there is also  interest from further afield. Israel’s Bank Hapoalim,  for example, completed its acquisition of Demir Kazakhstan Bank (since re-branded Bank Pozitiv) in  November 2007, and Bank of Tokyo Mitsubishi is due -to set up a representative office in early 2009, with  the initial aim of serving Japanese companies.

Invest in Kazakhstan An official publication of the Government of the Republic of Kazakhstan, 2009. Page: 84-86.

Tax and investment priorities 0

Posted on March 15, 2010 by KazCham

THE LATEST BI-ANNUAL session of the high-level Foreign Investors’ Council in the northern farming centre of Kostanai in June was called ostensibly to focus on the investment potential of the agriculture sector. But how Kazakhstan will continue to attract foreign investment generally in the context of the new tax structure introduced at the start of the year was at the forefront of the minds of many senior executives and government officials who took part.

The global economic outlook and the government’s current focus  on ‘shovel-ready’, local content agricultural and infrastructure  programmers is light-years away from the world of 24-hour a day  whirling tower cranes and sky-high commodity prices, which  provided the optimistic background to earlier drafts  of the new 2009 tax code that came into effect at the  start of the new year.

Drafters took their cue from President Nazarbayev’s annual address of February 2008 when he called for a new tax code that “must be aligned with the objectives of the new phase in Kazakhstan’s development, a code designed to promote modernization and diversification of the economy”.  In setting out the basic principles of the new code, the president added that the most important element h was to be “a reduction of the total tax burden on non-commodity sectors of the economy, particularly small and medium-sized businesses.” To underline this, he added: “The expected shortfall in government h revenue should be offset by greater economic returns from the extractive sector.”

A year later, in his address to the nation in March 2009, at a time when the authorities were grappling with the banking crisis and re-adjusting to the global collapse in prices of the country’s commodity exports, President Nazarbayev re-affirmed h the strategic direction “charted in the National Development Strategy until 2030” which is “economic growth based on the developed market economy with a high level of foreign investment”.

With the onset of spring came the first tentative signs of recovery from the depths of the crisis that followed the collapse of Lehman Brothers in September 2008. Oil and other commodity prices  started to rise, mainly on Chinese buying, and the  shares of Kazakhstan’s internationally-traded mining  and resource stocks recovered much of their previous – losses on the London and Kazakh stock exchanges.  Kazakhstan, the first country to be hit by the US sub-prime mortgage crisis in August 2007, suddenly started to look like one of the best placed to get back to sustained growth.

Shaken, but not stirred, the economy’s survival is partly the prize for years of careful state budgeting.  This allowed the accumulation of more than $40 billion of reserves in the National Bank of Kazakhstan and the Oil Fund while oil prices were high and reduced the need for public borrowing when market conditions suddenly turned hostile. Running down the previously acquired surplus allowed fiscal expansion and a $21 billion bank and enterprise rescue package to be financed domestically in large part, although a $10 billion oil-asset for-finance deal with China in April certainly helped to steady nerves.

The weak point in the economy was that the public-sector surplus was more than offset by heavy foreign borrowing by the private sector, which issued substantial foreign equity and accumulated debt before the markets turned sour. So while Kazakhstan’s trade has remained in surplus, the current account turned sharply negative as banks and corporate borrowers confronted unexpectedly large foreign debt obligations, which have either had to be refinanced at substantially higher rates or partly rescheduled.

Even with the deployment of accumulated oil revenues, an external funding gap of more than 11 per cent of GDP still needs to be covered by foreign direct investment (FDI) in 2009, despite the fact that the slowdown in economic growth will cut the import bill. The big question is, will that investment come under the new tax regime?

A new tax system

The new tax code came into force at the start of January 2009. It was prepared in near-record time during 2008 and some haste can be perceived in its content. As the global economy continued to deteriorate in early 2009, the Kazakh leadership called for a ‘moratorium’ on further tax code changes until after 1 July. This showed understanding that tax h policy adjustments alone would not provide a ‘quick fix’, however critical tax policy remained for meeting longer term macro-economic challenges.

In keeping with the generally-progressive policy that Kazakhstan has sustained in tax policy reform, the new code represents some, albeit incomplete, forward thinking. It incorporates provisions to help improve clarity and certainty in the tax system as to the rights and obligations of taxpayers and of the state’s fiscal and other relevant agencies.

Among its key policy objectives are reduction of the tax burden on the non-extractive sectors and individuals; and a substantial increase in that of subsurface users and large taxpayers, more generally.  This approach seeks, in a supposedly ‘revenue- neutral’ way, to hasten the diversification of the economy into non-extractive sectors.

Concurrently entering into force is an amended transfer pricing law, which continues negatively to exert control over specified business transactions, whether between related or unrelated parties. In prospect during 2009 are related laws to control money-laundering and fiscal fraud, as well as an amended law on sub-surface use. New outline administrative arrangements orders and procedures are being promulgated to guide the operations of the fiscal agencies.

These new and revised instruments were essentially conceived in economic times more robust than when their entry into force took place. The government may well have acted presciently with tax cuts for the non-extractive sectors which could provide a stimulus h to business activity during the economic crisis. That remains to be seen. But what is already clear is that the new fiscal regime for the oil and minerals sectors provides no incentive to the foreign investment considered essential for achieving the 2030 strategy.  Moreover, a continuing, unfortunate aspect of the tax system for all taxpayers is the ‘gap’ between tax policy and the tax laws and their administration, which some investors believe had begun to show almost ‘Bolivars’ tendencies.

The business tax regime

One of the key elements in the new code is a reduction in the corporate income tax (CIT) rate from 30 per cent to 20 per cent, dropping further to 17.5 per cent in 2010 and 15 per cent in 2011. Deductible expenses are correlated with the activities connected with earning income and the loss carry forward period is extended from three years, or seven years for -subsurface users, to ten years. For small and medium- sized enterprises (SMEs) the obligation to calculate and pay CIT advance payments has been repealed.

CIT investment preferences are not available, however, to organizations operating in free economic zones or producing and/or selling excisable goods, or producers of agricultural products and village consumer’s co-operatives

The tax treatment of derivatives depends upon whether the instrument is a normal ‘derivative’ financial instrument, qualifies for hedging accounting, or involves delivery of a hedged item.  Hedging income or loss shall be tax accounted in accordance with the rules determined for the underlying hedged item. In other cases, income is taxable on its own and can be utilised only against income from other derivatives, subject to the ten-year -carry-forward period.

Another eye-catching element in the new code  is a reduction in VAT from 13 to 12 per cent, but  VAT now also applies to goods/services in special  economic zones, previously zero-rated, and to  geological exploration, also previously exempt. The reporting period is now quarterly and a simplified procedure of VAT refund for large ‘good faith’  taxpayers is introduced.

The property tax on immovable property assets rises to 1.5 per cent and investment preferences (including land tax preferences) have been repealed,  while the social tax continues its transition from the h existing regressive scale of 13 per cent to 5 per cent,  to a flat rate of 11 per cent.

Overview of the subsurface users’ fiscal regime

The abolition of CIT preferences is not applicable to assets used for activities within a subsurface use contract (effective from 1 January 2012). The government can permit a subsurface user to apply preferences under the subsurface use contracts  concluded between 1 January 2009 and 1 January  2012, if the extraction of minerals happened within  this period of time. Subsurface users applying investment preferences are not allowed to apply  double depreciation rates on fixed assets exploited in -Kazakhstan for the first time.

The stability of tax regimes remains valid only for production-sharing agreements signed prior to  1 January 2009, which underwent obligatory tax  ‘expertise’, and subsurface use contracts approved  by the president. For all other contracts, the current tax legislation applies. As to the signature bonus, the minimum starting bonus for exploration contracts  is $27,000; for production contracts, $29,000; for  mineral exploration contracts, $2,700; and for  mineral production contracts, $4,800.  The commercial discovery bonus tax base, at a rate  of 0.1 per cent, is determined by prices on the London Metal Exchange (LME), or as published in Piatt’s Crude Oil Marketwire. If minerals are not listed on the LME,  the base is determined by the planned production  costs indicated in the feasibility study.

A new, complex minerals production tax (MPT)  replaces Royalty, and under the new regime,  transportation costs are not deductible. MPT rates for  crude oil and gas condensate rise from five to 18 per  cent in 2009, to six to 19 per cent in 2010 and seven  to 20 per cent in 2011. For domestic sales, crude oil  and gas condensate tax rates drop by 50 per cent. The  MPT rate for exported natural gas is 10 per cent, but  for domestic sale, rates range from 0.5 per cent to 1.5  per cent. The rate for minerals that undergo initial  processing and for coal range from 0-22 per cent in  2009, rising to a maximum of 23 per cent in 2010 and  24 per cent in 2011. For coal itself, the rate is zero.

For crude oil and gas condensate, the MPT base  value is determined upon sale to a refinery within  Kazakhstan, at the actual selling price or upon  transfer for reprocessing/use for own needs, at the  production cost, determined under IFRS, increased by h 20 per cent. Export values are calculated on the basis  of average world prices, particularly for Urals Med &  Brent Dtd, published in Platts’ Crude Oil Marketwire.

For natural gas, the MPT base is the value of  extracted natural gas, determined upon domestic sale at the weighted average selling price and if used for  own needs at the production cost, determined under  IFRS, increased by 20 per cent.

Gas exports are valued at the average world price,  published in Crude Oil Marketwire.

For minerals (except common minerals) and  coal, the MPT base is the value of depleted mineral  resources and coal determined for minerals listed on  the LME, at average exchange prices and for minerals  not listed on the LME, at the weighted average  exchange prices at the time of sale or own-use.

A renovated excess profits tax (EPT) is charged on  the same sliding progressive scale from 0 per cent to  60 per cent, but the thresholds are changed.

The rent tax on oil exports applies to exported  crude oil, gas condensate and coal with rates for  exported crude and gas condensate up to 32 per  cent, linked to world market prices. The top bracket  is $200 per barrel and price thresholds are changed.  The tax base is determined as the exported volume  multiplied by the world price without deduction  of transportation expenditures. The tax rate for  exported coal is 2.1 per cent, with the tax base  determined as the exported volume multiplied  by the selling price – again without deduction of  transportation expenditures.

Outside the scope of the new tax code is an export  duty, which can be applied by government decree on  crude oil, bitumen and distillates with progressive  rates referenced to quarterly average world prices.  The rate in early May 2009 on crude oil was $139 per  tonne, with a reduced rate of $121.32 per tonne for  rent tax payers.

International taxation

The new code’s withholding tax (WHT) is levied  at 15 per cent on dividends and interest, with a  capital gains royalty of 16 per cent and a 20 per  cent charge on any income of an entity registered  in a tax haven. Insurance premiums under risk  insurance agreements are taxed at 10 per cent, while  income from international transportation services  and insurance premiums under risk reinsurance  agreements is charged at 5 per cent, and other  income at 20 per cent.

Further, the controlled foreign company rules now  apply to individuals and companies tax-resident in  Kazakhstan and in respect of tax havens where the  critical tax rate is 10 per cent or less.

The new tax code also prescribes exemption of  dividends from WHT for outbound dividends if a non- resident owns shares/participation interest for more  than three years, and if more than 50 per cent of the  value of shares/participation interest derives from  non-subsurface user’s property. It also exempts capital gains from WHT when received by a nonresident  from selling shares/participation interest, except for  shares in Kazakhstan residents holding subsurface  use rights and in foreign or Kazakhstan entities, if  more than 50 per cent of the shares’ value is derived  from subsurface user’s property. An extraordinary  collection mechanism is established for capital gains  of subsurface users

Tax administration

The new tax code introduces a tax accounting policy  requirement upon taxpayers, prescribes separate tax  accounting rules, provides for submission of a single  CIT return by a subsurface user operating under  ring-fenced contracts and stipulates submission of  financial statements under IFRS, along with a CIT  return. Administrative responsibility lies with  the taxpayers

The new tax code

While imposing tax is a sovereign right of states,  attracting FDI is a ‘bilateral’ issue determined by  a range of parameters, including tax. We believe  that in respect of the key extractive industries  sector, Kazakhstan’s new tax code largely ignores  internationally-proven criteria for attracting  investment. These include incentives to encourage  full and efficient exploitation of hydrocarbons  that are economic before tax, an equitable balance  between government and contractor interests,  and the stability needed to support long-term  investment. Attracting FDI is also helped by clarifying administration and simplifying compliance together  with a focus on profit rather than production as the  tax object.

In the new tax code the maximum rate of mineral  production tax (MPT) is 20 per cent, compared to  6 per cent for the replaced royalty at the equivalent  production level, while the maximum rate of  export rent tax is 32 per cent, still based on world  prices, although temporarily adjusted to 0 per  cent by government decree. Both of these taxes are  contingent upon the current average prices for the  fiscal period prevalent at the International (London)  Stock Exchange, but without provision for deduction  of transportation costs.

This means, therefore, that the marginal tax rate  on the upper tier of production is effectively much  higher than the simple addition of 32 per cent plus  20 per cent equals 52 per cent, since transportation  costs are one of the most significant costs of oil field  development in Kazakhstan. Thus, if it costs, for  example, $10-$20 a barrel to move oil from a Kazakh  oil field to Europe, the market value of oil produced  at that field in Kazakhstan is Brent minus $10-$20.

With the addition of transport charges, oil  companies now bear the tax on revenues they never  received, but earned instead by other entities,  including Kazakh state-owned companies. The result  is that internal rates of return (IRRs) – even at oil  prices as high as $65/barrel – fail to meet the oil  companies’ investment hurdles.

ITIC believes that other positive changes to encourage responsible and complete exploitation of subsurface territories would include reinstating  the VAT exemption on the transfer of subsurface  licenses and or rights and the elimination of  ring-fencing. Most importantly, the code should include transportation and other ‘netback’ costs in computation of both the MPT and excess profits tax.

Further tax reform needed to sustain competitiveness and help meet President Nazarbeyev’s goal of joining the “world’s 50 most competitive nations” should commend itself to the Astana  authorities and legislators as they address the issue  after 1 July. Reform of the subsurface users’ tax  regime, in particular, is needed to attract further,  mutually-equitable investment into the extractive  sectors. The current new code, drawn up during record high commodity prices with the explicit intent of  increasing the government’s take, makes the economic attractiveness of new investments questionable. *

This is an edited version of a more detailed analysis by Daniel Witt, president of the International  Tax and Investment Center in Washington, and  Douglas Townsend, senior adviser to ITIC and former Australian ambassador to Kazakhstan. ITIC has been  working on tax and investment reforms in the former Soviet republics since 1993. A more detailed version is available on www.iticnet.org under ‘publications’.

Invest in Kazakhstan An official publication of the Government of the Republic of Kazakhstan, 2009. Page: 92-95.

Charles Raether Appointed Mid-Atlantic Representative for KazCham 0

Posted on March 03, 2010 by KazCham

We are proud to announce that Charles Raether, Executive Director of AmLaw Consulting Group, has become our Mid-Atlantic representative to lead and promote the Chamber’s activities in the greater Washington, D.C. area to support and expand U.S. – Kazakhstan business, trade, and investment. The Chamber’s offices in the United States were recently to increase awareness of Kazakhstan investment programs and initiatives of the Kazakhstan government as well as foster commercial ties between U.S. and Kazakhstan firms in a broad spectrum of industry topics.

The Kazakhstan government recently announced more than 160 new economic initiatives totaling more than $44 billion to attract investment and diversify Kazakhstan’s economic base. These signify significant business opportunities for U.S. suppliers, manufacturers, and investors across key economic sectors such as agribusiness, construction, natural resources, and telecommunications.

AmLaw Consulting will be cooperating with the Chamber’s initiatives planned for 2010. A schedule of webinars on business-related topics will soon be released which will be led by various specialists from business and governmental circles from Kazakhstan and the U.S. A major investment conference is in the works to be held in New York later this year as well as an investment event in Kazakhstan.

KazRefinEx 2010 0

Posted on February 22, 2010 by Sergey Sek

The 5th Annual International Symposium and Exhibition on Refining and Petrochemistry
25 – 26 March 2010 | Rixos Almaty Hotel | Almaty | Kazakhstan
I would like to take this opportunity to invite oil and gas processing suppliers to participate at KazRefinEx 2010: 5th International Symposium, Exhibition and Award for the refining and petrochemical industry in Kazakhstan, under a new format and new brand, ‘KazRefinEx’ which will be held on the 25 – 26 March 2010 in Almaty.

The latest Kazakhstan Oil & Gas Report from BMI forecasts that the country will account for 4.75% of Central and Eastern European (CEE) regional oil demand by 2014, while providing 16.18% of supply.

Caspian Business Events are currently offering a special 20% discounted rate on a place at KazRefinEx 2010 for Kazakhstan Chamber of Commerce members. There are a limited number of spaces available so make sure you act today to secure your place.

KazRefinEx 2010 in Almaty provides you with an ideal opportunity to increase your company’s profile within the market as well as providing you with the opportunity to network with a highly focused audience. As an attendee your company brand and profile will be associated with the some of the largest refining and petrochemistry community gatherings in the Kazakhstan.

If you would like to find out more about presenting a paper or information how to register as delegate, please contact us by email: enquiry@caspian-events.com quoting reference ‘KRE10KAZCHAM’ to take advantage of this special offer. Please note this offer is only available until the 24th February. For more information, please visit www.caspian-events.com

President of the largest Kazakh university to talk at the Columbia University in NY 0

Posted on January 23, 2010 by Sergey Sek

THE HARRIMAN INSTITUTE AND EURASIA INITIATIVE (EI)

present an event in the Harriman Institute

Central Asia Lecture Series
BUILDING A GLOBAL CENTER OF EDUCATIONAL EXCELLENCE:THE CASE OF KAZAKH NATIONAL UNIVERSITY

Professor Bakytzhan Zhumagulov

Rector of

Kazakh National University
Please join us for Professor Bakytzhan Zhumagulov’s talk on the recent changes in the education system in Kazakhstan. He will also discuss how Kazakh National University is reforming to becoming one of the top universities in the region.

***

Bakytzhan Zhumagulov is one of the most accomplished scholars and education specialists in Kazakhstan. He has authored seven scholarly books and more than a hundred academic articles, winning numerous national and international awards in the fields of science, technology and education. In addition to these accomplishments, Dr. Zhumagulov contributes to intellectual and policy debates about the future of the education system in Kazakhstan.

February 15, 2010 at 6pm

International Affairs Building Room 1510

Columbia University

420 West 118th Street, NY 10027

The event is free and open to the public

Light refreshments will be served
http://www.harrimaninstitute.org/programs/central_asian_events.html

Chamber of Commerce and Industry of the Republic of Kazakhstan in the USA 9

Posted on January 05, 2010 by Sergey Sek

We are proud to announce the opening of an official representative office of the Chamber of Commerce and Industry of the Republic of Kazakhstan in the USA (“KazCham”).

Chambers of commerce have traditionally been the associations of enterprises engaged in trade, manufacturing and services. The predecessors of the medieval guild houses were merchants and artisans. The overall objective of the chambers around the world – protecting the interests of business and promoting their development.

Kazakhstan Chamber of Commerce and Industry (“Chamber”) was established in 1959 by decree of the Council of Ministers of the Kazakh Soviet Republic.

The Chamber represents interests of the Kazakhstani business community and provides a set of essential business services. The Chamber serves as the social and economic partner for small and medium-sized businesses in the dialogue with government, big business, as well as partners in foreign trade activities. The Chamber has signed over 70 cooperation agreements with foreign countries: Italy, UAE, Russian Federation, India, Turkey, Jordan, Syria, South Africa, Egypt, etc.

Each year, the Chamber, which has 16 regional chambers, provides 70 thousand services. Included are a number of expert and inspection services, consultations on foreign trade activities, assessment services for the customs value of goods, confirmation of documents on foreign trade transactions, the consideration of disputes arising between the partners.

When conducting business forums in Kazakhstan and abroad, visiting foreign markets as part of trade missions is a proven and cost-effective way to grow your business. A business visit, professionally planned and managed by Chamber specialists, allows one to achieve results much more efficiently than a few self-organized trips.

The practice shows that the majority of business contacts, organized and implemented by the Chamber, are effective.

Membership in the Chamber is voluntary.

After decades of hard work, the Chamber gained tremendous experience and serves for the benefits of your business.

In 2009 the Chamber of Commerce of the Republic of Kazakhstan celebrates its 50th anniversary.



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